The Centers for Medicare & Medicaid Services (CMS) began its Comprehensive Care for Joint Replacement (CJR) model on April 1st. This model tests bundled payments coupled with quality measurement targets for an episode of care associated with hip and knee replacements for Medicare patients in order to encourage providers to work together to improve care coordination from the initial hospitalization through the recovery period.

The model holds hospital participants financially accountable for the quality and cost of the defined CJR episode. The episode begins with an admission to a participant hospital for patients discharged under certain DRG codes associated with hip and knee surgeries. The episode will include all Medicare Part A and B costs with certain exclusions for unrelated conditions. At the end of the year, actual spending for the episode is compared to the target episode price defined by CMS. If spending exceeds the targets, hospitals may need to pay back a portion of the overspending.

Although this model places hospitals ultimately at financial risk for overspending, the hospitals are encouraged to work with physicians and other providers involved in the care during the episode. Hospitals may share in payments received by CMS if additional payments are received for beating the CMS spending target.

The demonstration will last 5 years and is mandatory for identified hospitals located in certain Metropolitan Statistical Areas (MSAs). The included North Carolina MSAs are Asheville, Charlotte, Durham/Chapel Hill and Greenville.

Read more about this program on the CMS Innovation Center webpage. Although there is currently proposed legislation to delay the start of this program, the program began as scheduled on April 1, 2016. Visit ourQuality Time with the NCMS blog often for updates.